State Pension Changes and the impact on Women

Wednesday, January 13, 2016

It was with some interest that we read in the press recently about how the government is engulfed in a row with women born in the 1950s who have been affected by two rises in their state pension age. In a parliamentary debate, Labour accused the government of failing to give women affected adequate notice of the changes, leading to financial hardship for some. The government has denied that women were not given notice. Ministers have pledged that individuals affected by future increases to their state pension age will be given at least 10 years’ notice.

The government faces the prospect of a legal challenge on behalf of hundreds of thousands of women who say they were given inadequate warning about increases in their state pension age. An estimated half a million women born in the 1950s have been affected by changes which have seen their state pension age pushed back by six years for some women. Campaigners say those affected were given little or no personal notice by the government, and had no time to make alternative plans, leaving many in financial hardship.

A group has been founded named Women Against State Pension Inequality (Waspi). They have approached lawyers. The campaigners’ concerns centre on changes set in place by the government of the day in 1995 to bring the age that women would start to receive the state pension (then 60 years) in line with men’s at 65. Starting from 2010, women’s state pension age would gradually rise in stages, set to reach 65 and equalise with men by 2020.

However, in 2011, the coalition government decided to quicken the pace of the rise, so that women’s state pension age would reach 65 by November 2018. Then, for both men and women, there would be a further rise to 66 over the next two years up to November 2020. Some women who were expecting to retire at 60 last year, only discovered that there expected sate pension age had been pushed back to 66 when they requested a state pension forecast six months before their 60th birthday.

The government has denied that women were not given notice. Ministers have pledged that individuals affected by future increases to their state pension age will be given at least 10 years’ notice.

The issue comes as the government faces intense scrutiny over its rollout of major changes to the state pension due to come into effect next year. The work and pensions select committee announced it would probe how the government has communicated the switch to the “single-tier pension”, amid concerns of widespread confusion among the public over what they will get.

A review of the state pension age — which could pave the way for people in their 20s to qualify at 70 — is set to be launched by the government. Ministers are expected to announce who will head an independent review into the pace of future increases in the state pension age within weeks.

Currently, the state pension age for men is 65, with women’s state pension age gradually rising to equalise with men by 2016. The next rise, to 66, will be phased in between late 2018 and 2020, with an increase to 67 set for 2028.

In 2013, the chancellor announced that future changes to the state pension age should be based on the principle that people should expect to spend up to a third of their adult life receiving the state pension. The government said this implied the rise in the state pension age from 67 to 68 would be brought forward to the mid-2030s and the increase to 69 to occur in the late 2040s.

The Department for Work and Pensions said the review was legislated for in 2014 and would need to report to parliament by May 2017. Analysis from the Government Actuary’s Department will be considered as part of the process.

The government has also indicated that they want to consider not only life expectancy but wider issues, including social, occupational and gender factors.

People have recently been dying at faster rates than the Office for National Statistics had expected.

You would be forgiven for wondering how this impacts on Civil Servants (as whole and not just women) and our pensions – we did get 10 years notice (prior to the then retirement age) of being stitched up at least. Cold comfort when we have seen real and continuing pay cuts of which pensions are but one factor in your remuneration.